What is organizational culture?

Definition
Organizational culture is the set of values, beliefs, attitudes, systems, and rules that
outline and influence employee behavior within an organization. The culture reflects
how employees, customers, vendors, and stakeholders experience the organization and
its brand.
Don’t confuse culture with organizational goals or a mission statement, although both
can help define it. Culture is created through consistent and authentic behaviors, not
press releases or policy documents. You can watch company culture in action
when you see how a CEO responds to a crisis, how a team adapts to new customer
demands, or how a manager corrects an employee who makes a mistake.

Importance
 mprove recruitment efforts – 77% of workers consider a company’s culture
before applying
 Improve employee retention – culture is one of the main reasons that 65% of
employees stay in their job
 Improve brand identity – 38% of employees report wanting to change their job
due to poor company culture
 Improve engagement – companies with a positive culture have up
to 72% higher employee engagement rate
Organizational culture affects all aspects of your business, from punctuality and tone
to contract terms and employee benefits. When workplace culture aligns with your
employees, they’re more likely to feel more comfortable, supported, and valued.
Companies that prioritize culture can also weather difficult times and changes in
the business environment and come out stronger.
Culture is a key advantage when it comes to attracting talent and outperforming the
competition. 77 percent of workers consider a company’s
culture before applying, and almost half of employees would leave their current
job for a lower-paying opportunity at an organization with a better culture. The culture
of an organization is also one of the top indicators of employee
satisfaction and one of the main reasons that almost two-thirds (65%) of
employees stay in their job.

Consider Microsoft and Salesforce. Both technology-based companies are world-class

performers and admired brands, and both owe this in part to prioritizing culture.
Microsoft, known for its cut-throat competitiveness under Steve Balmer, has
been positively transformed by Satya Nadella, who took over as CEO of the
company in 2014. He embarked on a program to refine the company culture, a process
that upended competitiveness in favor of continuous learning. Instead of proving
themselves, employees were encouraged to improve themselves. Today Microsoft’s
market cap flirts with $1 trillion and it is again competing with Apple and Amazon as
one of the most valuable companies in the world.
Salesforce puts corporate culture front and center and has experienced incredible
growth throughout its history. Marc Benioff, Salesforce’s founder and CEO,
established philanthropic cultural norms that have guided the company over the past
two decades. All new Salesforce employees spend part of their first day
volunteering and receive 56 hours of paid time to volunteer a year. This focus on
meaning and mission has made Salesforce one of the best places to work in
America according to Fortune, and it hasn’t compromised profits either:
Salesforce’s stock price has surged year after year at an average of over 26%

Qualities of a great organizational

culture
Every organization’s culture is different, and it’s important to retain what makes your
company unique. However, the cultures of high-performing organizations consistently
reflect certain qualities that you should seek to cultivate:

• Alignment comes when the company’s objectives and its employees’ motivations
are all pulling in the same direction. Exceptional organizations work to build
continuous alignment to their vision, purpose, and goals.
• Appreciation can take many forms: a public kudos, a note of thanks, or a
promotion. A culture of appreciation is one in which all team members frequently
provide recognition and thanks for the contributions of others.
• Trust is vital to an organization. With a culture of trust, team members can
express themselves and rely on others to have their back when they try something
new.

• Resilience is a key quality in highly dynamic environments where change is

continuous. A resilient culture will teach leaders to watch for and respond to change
with ease.
• Teamwork encompasses collaboration, communication, and respect between team
members. When everyone on the team supports each other, employees will get
more done and feel happier while doing it.
• Integrity, like trust, is vital to all teams when they rely on each other to make
decisions, interpret results, and form partnerships. Honesty and transparency are
critical components of this aspect of culture.
• Innovation leads organizations to get the most out of available technologies,
resources, and markets. A culture of innovation means that you apply creative
thinking to all aspects of your business, even your own cultural initiatives.
• Psychological safety provides the support employees need to take risks and
provide honest feedback. Remember that psychological safety starts at the team level,
not the individual level, so managers need to take the lead in creating a safe
environment where everyone feels comfortable contributing. Now that you know what
a great culture looks like, let’s tackle how to build one in your organization.
8 steps to building a high-performing
organizational culture
Creating a great organizational culture requires developing and executing a plan with
clear objectives that you can work towards and measure. The 8 steps below should
serve as a roadmap for building a culture of continuity that will deliver long-term
benefits across your company.
1. Excel in recognition

Recognizing the contributions of all team members has a far-reaching,

positive effect on organizational culture. Experts agree that when an organization
makes appreciating employees part of its culture, important metrics like employee
engagement, retention, and productivity improve.
Making recognition part of your culture means it should be frequent, not
something saved for milestones or work anniversaries. Companies who invest in
consistent social recognition see a remarkable business impact: they are four
times more likely to increase stock prices, twice more likely to improve NPS scores,
and twice more likely to improve individual performances.
Monetary recognition is valuable as well. Consider a points-based recognition
program that will allow employees to easily build up point balances that can be
redeemed for a reward that’s meaningful to them.

To nurture organizational culture, recognition should be clearly tied to company

values and specific actions and supported by leadership. After all, 92 percent of
employees agree when they’re recognized for a specific action, they’re more likely to
take that action again in the future.
Last but not least, leadership needs to take center stage in your recognition
efforts, as they’re the cultural trendsetters for your entire company. Incorporate a
recognition talk track into your leadership training and share top tips with managers
on how to recognize others and why it matters.
2. Enable employee voice

Creating a culture that values feedback and encourages employee voice is essential.
Failing to do so can lead to lost revenue and demotivated employees.
First, collect feedback using listening tools that make it easy for employees to
express what they’re feeling in the moment, like pulse surveys and workplace
chatbots. Then, analyze the results and take action while the findings are relevant.
This strengthens your culture and leads to benefits like higher employee fulfillment
and greater profitability. According to a Clutch survey, 68 percent of
employees who receive regular feedback feel fulfilled in their jobs, and Gallup
found that organizations with managers who received feedback on their strengths
showed 8.9 percent greater profitability. And watch for more subtle expressions of
feedback, like body language. Managers should treat all conversations with employees
as opportunities to gather and respond to feedback and act as a trusted coach.
. Make your leaders culture advocates

Building a strong workplace culture is in the hands of team leaders and managers. If
your workplace culture prioritizes certain values and your leadership team doesn’t
exemplify them — or displays behaviors that go against them — it undermines the
effort. Team members will recognize the dissonance between stated values and lived
behaviors. They may even start to emulate negative behaviors, believing they are
rewarded by management.

Your leadership team can help build the right culture by prioritizing it in every
aspect of their work lives. This includes openly discussing the organization’s
culture and values and incorporating employee feedback into their cultural advocacy
efforts. While 76 percent of executives believe their organization has a well-
communicated value system, only 31 percent of employees agree. When employees
see leaders living your culture, they’ll follow suit.
4. Live by your company values

Your company’s values are the foundation of its culture. While crafting a mission
statement is a great start, living by company values means weaving them into
every aspect of your business. This includes support terms, HR policies, benefits
programs, and even out-of-office initiatives like volunteering. Your employees,
partners, and customers will recognize and appreciate that your organization puts its
values into practice every day. You can also recognize employees for actions that
exemplify your values to show that they’re more than just words and incentivize
employees to build the value-based culture you want to see.
5. Forge connections between team members

Building a workplace culture that can handle adversity requires establishing strong
connections between team members, but with increasingly remote and terse
communication, creating those bonds can be challenging. Encouraging collaboration
and engaging in team building activities — even when working remote — are
two effective ways to bring your team together and promote communication.
Look for and encourage shared personal interests between team members as well,
especially among those from different generations that might otherwise have a
difficult time relating to each other. This can create new pathways for understanding
and empathy that are vital to improving communication, creativity, and even conflict
resolution.
6. Focus on learning and development

Great workplace cultures are formed by employees who are continually learning and
companies that invest in staff development. Training initiatives, coaching,
and providing employees with new responsibilities are all great ways to show
your team that you’re invested in their success.
Workplace Coaching: What is it and how is it effective?
A culture of learning has a significant business impact. Find Courses’ most recent
benchmark study found that companies with highly engaged employees were 1.5
times more likely to prioritize soft skills development. It also found that companies
that had experienced revenue growth in the previous financial year were twice more
likely to use innovative learning technologies and three times more likely to increase
their learning and development budgets.
7. Keep culture in mind from day one

When an employee’s perspective doesn’t match your company culture, internal

discord is likely to be the result. Organizations should hire for culture and reinforce it
during the onboarding process and beyond. Practices and procedures must be taught,
and values should be shared.

When hiring, ask questions focused on cultural fit, like what matters to the
interviewee and why they’re attracted to working at your company. But these
questions shouldn’t be the sole determining factor when evaluating a candidate, as the
best organizations keep an open mind to diverse perspectives that can help keep
their culture fresh.
8. Personalize the employee experience

As modern consumers, your employees expect personalized experiences, so you

need to focus on ways to help each team member identify with your culture. Tools
like pulse surveys and employee-journey mapping are great ways to discover what
your employees value and what their ideal corporate culture looks like. Take what you
learn and tailor your actions to personalize the employee experience for your team.
Once you start treating your employees with the same care you treat your
customers, a culture that motivates each individual at your organization is
sure to follow.